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Wednesday, November 30, 2016

China Slaps 10% Tax on Ferrari, Bentley Cars to Curb Luxury. China
is slapping a 10 percent tax on cars like the Ferrari GTC4Lusso,
Bentley Bentayga and Aston Martin DB9 in a bid to combat conspicuous
consumption and promote more fuel-efficient vehicles. Buyers of
autos costing 1.3 million yuan ($189,000) or more will be hit with the
tax starting Thursday, according to the Ministry of Finance. The levy on
“super luxury” vehicles is meant to “guide reasonable consumption,”
lower emissions and save energy, the ministry said in a statement on its
website.

China Risks Stagnation, Ex-Goldman Dealmaker Says.China
risks economic stagnation unless it quickly removes barriers hampering
entrepreneurs seeking to enter industries from health care to education
to financial services. That’s according to Fred Hu, a former Greater
China chairman for Goldman Sachs Group Inc. who has advised the central
government on financial, pension and state-enterprise reforms.
"Economic reforms have been slow-paced, way short of expectations," said
Hu, founder and chairman of Beijing-based investment firm Primavera
Capital Group. "China should discard outdated regulations and policies
that have hampered new business formation. Unfortunately doing so means
taking power away from over-extending government agencies and
bureaucrats. Right now, the bureaucracy just has no appetite to
undertake such reforms."

Asian Stocks Rise on Oil Deal, Dollar Gains as Bond Rout Deepens.
Asian equities rallied as a deal to cut global oil output fueled gains
in energy shares, while evidence of strength in the U.S. economy sank
bonds and supported the dollar. The MSCI Asia Pacific Index added .8%
as of 10:57 am Tokyo time, ending a two-day decline as a sub-gauge of
energy stocks jumped 4.3%.

Texas Shale Is Big Winner as OPEC Deal Brightens Oil Outlook. (video)Hangover Awaits as OPEC Celebrates Its Biggest Accord in Years. Let OPEC celebrate. For now.
The oil club is dizzy with its own success after a harmonious meeting
in Vienna, where it surprised the world by agreeing to its first
production cut in eight years. Oil prices up 10 percent? Check. Saudi
Arabia and Iran in agreement? Check. OPEC and Russia working together?
Check. After being left for dead, OPEC pulled it off once again.

Schumer Deflects Blame To IndyMac, Regulator. (July 2008) Sen. Charles Schumer, hit with criticism from a federal regulator that
he contributed to the failure of IndyMac Bank, said he may have caused
some depositors to withdraw their money but said he wasn't responsible
for the bank's downfall. The saga started in late June, when Sen.
Schumer's letters to the FHFB, OTS and the Federal Deposit Insurance
Corp. rang alarms that IndyMac "could face failure if prescriptive
measures are not taken quickly." He noted the thrift's falling stock
price, climbing delinquency rate and recent downgrading by analysts. Sen.
Schumer's office publicized the letter June 27, providing it to The
Wall Street Journal and other publications. A June 28 story in IndyMac's
hometown newspaper, the Pasadena Star-News, had a "very inflammatory
headline," Sen. Schumer said. It read: "IndyMac appears close to
collapse." The story in the California newspaper mentioned Sen.
Schumer's letters, as well as a shareholder lawsuit and other signs of
trouble at IndyMac. The newspaper didn't immediately respond to a
request for comment. IndyMac on July 1, a Tuesday, said Mr. Schumer's
statements caused "elevated customer inquiries and withdrawals" on June
27 and June 28, and that about $100 million had been withdrawn.

BOTTOM LINE:Asian indices aremostly higher,boostedby industrial and financial shares in the region. I expect US stocks to open modestly higherand toweakeninto the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Crude Near Two-Week Low as OPEC Deal Founders; Asian Stocks Rise.
Oil remained below $46 a barrel ahead of the make-or-break OPEC meeting
on stabilizing the crude market, as gains in Asian property shares
outweighed losses among commodity producers. The dollar trimmed its
steepest monthly advance since May. Crude bounced off a two-week low
reached Tuesday, when 10 hours of technical talks failed to resolve
differences between oil-producing nations ahead of Wednesday’s formal
meeting in Vienna. While miners and energy shares drove Australian
stocks lower, Japan’s Topix index rose with equities in South Korea. The
New Zealand dollar led currency gains in Asia along with the Korean
won, as the Bloomberg Dollar Spot Index maintained declines. Gold rose
amid the pre-OPEC talks jitters, while copper futures extended losses. The MSCI Asia Pacific Index added .3% as the Topix rose .2%, while the Kospi jumped .3%.

Treasuries Having Worst Month Since 2009 on Trump Ripple Effect.Treasuries
are having their worst month since 2009 after investors pulled money
from the U.S. bond market on speculation Donald Trump’s victory in the
presidential election will pave the way for increased fiscal stimulus. A Bloomberg Barclays index that tracks the Treasuries market has lost 2.5 percent this month through Nov. 28.
Meanwhile, benchmark 10-year yields have soared the most in
back-to-back months since the 2013 taper tantrum as investors shifted
into assets such as stocks, which they expect to benefit should Trump
succeed in pushing through his proposals.

Carrier Reaches Deal With Trump on Indiana Jobs, CNBC Says. Carrier
agreed to keep about 1,000 factory jobs at its furnace plant in
Indiana, CNBC reported, handing President-elect Donald Trump a victory
on an issue that had become a rallying cry in his campaign. A deal
between Trump and Carrier, a division of United Technologies Corp.,
includes new inducements from the state, CNBC reporter David Faber said
on Twitter. Vice President-elect and Indiana Governor Mike Pence
spearheaded the negotiating effort and Trump will travel to the factory
on Thursday to announce the agreement, Faber said.

Trump to nominate Steven Mnuchin for Treasury Secretary, sources say. (video) President-elect Donald Trump will nominate former Goldman Sachs banker Steven Mnuchin to be his Treasury Secretary,
two sources close to the transition told Fox News late Tuesday. One
source told Fox that a formal announcement of Mnuchin's nomination could
come as early as Wednesday. Mnuchin had long been considered a favorite
for the Treasury position. Two weeks ago, businessman and close Trump
associate Carl Icahn tweeted that Trump was considering Mnuchin for the
post. Mnuchin, 53, was appointed Trump's campaign finance chair this
past May. He previously worked at Goldman Sachs for 17 years, eventually
rising to run the firm's technology division. According to the Wall
Street Journal, Mnuchin left Goldman in 2002 and was later hired to run a credit fund set up by liberal billionaire George Soros.

There's a long list of reasons people might not like Donald Trump's pick for Treasury Secretary. Mnuchin
spent 17 years with Goldman Sachs, and his father worked at the bank
for 30 years in stock trading. He was head of the mortage department in
the early days of collateralized debt obligations and credit default
swaps, instruments that many have argued had a part to play in the
financial crisis. He then set up an investment fund with George Soros.
During the depths of the financial crisis in 2009, a group led by
Mnuchin bought the troubled housing lender IndyMac. The buyer group
included Soros, hedge fund billionaire John Paulson, former Goldman
Sachs executive Chris Flowers, and tech billionaire Michael Dell. After
renaming the company OneWest, Mnuchin served as chairman until selling
it to CIT Group in 2015.

More
Chinese Cities May Introduce Property Curbs. More cities will likely
introduce curbs following Shenzhen, Hangzhou, Shanghai and Tianjin,
according to a front-page commentary. Curbs aim to prevent asset bubbles
and risks in mid-to-long term rather than a short-term remedy to
control property prices, the commentary said.

BOTTOM LINE:Asian indices aremostly higher,boosted by industrial and technology shares in the region. I expect US stocks to open mixedand toweakeninto the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

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